Dear Citi Colleagues,
Earlier this morning, we announced an exchange offer for our preferred stock that I believe will enhance our capital position and bolster public confidence in Citi, and by extension, our financial system. You will find additional details on the offering in the news release here.

As you've heard me say, we and our regulators were focused on Tier 1 as the capital that supports our businesses—and based on our Tier 1 of 11.9%, we have been very well capitalized. However, there is now a greater focus on tangible common equity (TCE) ratios, and that has translated into a market confidence issue.

The market's loss of confidence in the financial system became a major distraction for all of us and I want to thank you for your perseverance in helping our clients see the facts about our financial strength and in keeping them as committed to us as we are to them.

Like all financial services companies, we will still need to navigate through the tough environment, but our announcement about our TCE today means that we should no longer be distracted by media and market speculation and that we can go back to leading from strength by focusing all of our attention on what really counts -- excellent client service, unique and innovative solutions, and positioning our businesses to realize the full promise of Citi. My highest near-term priority is to return the company to profitability as soon as possible.

We are well on our way to doing that. We have strategic clarity as a result of the management separation of Citicorp and Citi Holdings. We have significantly reduced expenses and headcount and we continue to reduce risk assets. All of these steps will help the world see what we already see about what makes our company so special and unique -- our people, our globality, and our strong client relationships that have been built over the past 200 years.

Our presence in 109 countries and our ability to link the world and help our clients with their needs anywhere in the world is our key strength. We are as committed as ever to our global franchise and believe that this is what distinguishes us from our peers. Our commitment to serving our clients and customers, especially in their time of need, is the nature of our company. For instance, in the U.S., we have played a leadership role in helping to keep families in their homes in a period of record home foreclosures. In fact, I think we should all be proud that we have kept over 440,000 families in their homes. And, we are committed to always being a systemically responsible company.

There has been a lot of talk about nationalization in the media. This is not a nationalization by any definition. The exchange offer and conversion we announced today does not represent additional capital from the government -- it changes only the form of investment. The government's stock ownership in the company will provide TCE as a bridge through this financial crisis and to profitability. We are responsible for our day to day operations and today's announcement does not change our oversight relationships with our regulators. The government now holds a significant common stock investment in us and we intend to provide an exceptional return to them, along with all shareholders. For those who have been concerned about nationalization, today's announcement should put their concerns to rest.

Many of us are shareholders and I want you to know that this was not an easy decision for us because we understand the impact of the dilution we're asking shareholders to bear. But, in the end, our business is about confidence and I wanted to take definitive steps to alleviate capital issues. I promise you that I am committed to rebuilding value. I want to ensure that the turnaround of Citi is a wealth creator for all of you who are shareholders. Within the next 60 days we hope to announce a long-term plan to ensure that all employee shareholders participate in our success.

I have received thousands of emails from you encouraging me to not give up hope and determination. I never have. And because of the dedication I've seen from all of you, I never will.

Since 1812, Citi has confronted many obstacles and successfully surmounted them all and has emerged stronger for the experience. The last few months have been a difficult chapter in our very long history. It's time for us to put this period behind us and be proud to be Citi again. I am.